European electric vehicle demand slows, Tesla's Berlin factory lays off 1,700 workers

Wallstreetcn
2026.01.22 08:39
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Tesla's Berlin factory has reduced its workforce by approximately 1,700 people, a decrease of 14%, reflecting the company's strategy to control costs and improve efficiency amid weak demand for electric vehicles in Europe. Tesla is focusing on cash preservation and factory efficiency. Although the traditional automotive business is under pressure for growth, the market is shifting its long-term value towards the Robotaxi and AI sectors

Tesla's super factory near Berlin has reduced its workforce by approximately 1,700 employees, highlighting the weak demand in the European electric vehicle market and the company's ongoing strategic adjustments to control costs. This is the latest manifestation of the electric vehicle manufacturer's global cost-cutting plans.

According to a report by Handelsblatt on the 22nd, internal documents cited by the newspaper show that the factory in Grünheide currently employs 10,703 workers, a decrease of about 14% compared to the number disclosed before the 2024 union elections. This is Tesla's only production base in Europe.

This round of layoffs is an extension of Musk's global workforce reduction plan set for April 2024, aimed at cutting more than 10% of employees to control costs and improve efficiency. In fact, Musk established the management guideline of "eliminating 10% each quarter" back in May 2018.

The layoffs also align with a broader trend expected in early 2026. Manufacturers and tech companies are continuously streamlining operations to cope with slowing demand growth, tightening financing conditions, and the pressure to protect profit margins after years of aggressive expansion.

Tesla Shrinks Automotive Line, Bets on AI and Robotaxi

In 2025, Tesla will shift its strategic focus from rapid expansion to business integration. Management will concentrate on cost control, factory efficiency, and cash preservation, as aggressive price cuts and weak demand have compressed the profit margins of the automotive business.

This shift occurs against the backdrop of a significant slowdown in the growth of the European electric vehicle market. After experiencing several years of rapid growth, manufacturers are facing a more challenging competitive environment and more cautious consumer spending.

Despite the traditional automotive business losing growth momentum, Tesla's stock price has shown relative resilience. Investors are increasingly focused on the company's long-term goals in robotaxi services, autonomous driving software, and artificial intelligence, viewing these as potential high-margin growth engines

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